ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

INTRODUCTION

This financial analysis indicates the signficant accounting and financial issues at various stages of a company's life cycle:: incepetion, early growth, pre IPO, IPO, fast growth, slow growth, downturn The analysis addresses the following financial issues Equity financing by type Equity financing by source Debt financing CFO support Advisors to the CFO Who manages cash Cash managmetn objectives Compliance and reporting issues Combinations Financial reports Boards Accouting systems Top financial offices Significant accounting issues

The workbook includes two worksheets Introduciton Life cycle analysis

File = 165281509.xls.ms_office Worksheet = Introduction

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

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FINANCIAL ISSUES

COMPANY LIFE CYCLE

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revenues ($ millions) multi national? number of accountants

0 no 0

1-3 no 1

3-10 yes 3-5

10-20 yes 5-20

20-50 yes 20+

equity financing - types

common seed preferred venture preferred take company public -- ipo take company private secondary offering floorless preferred founder angel venture public hedge fund owner bank -- factoring bank -- asset based line of credit bank -- bridge loan leasing company -- equipment line other -- mezzanine

xxx xxx xxxx xxxx xxxx

equity financing - source

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debt financing

xxx xxx xxxx xxxx xxxx xxxx xxx xxxx xxx

xxx

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

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50-500 yes 20+

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ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

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FINANCIAL ISSUES

COMPANY LIFE CYCLE

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pr ei

fa st

revenues ($ millions) multi national? number of accountants

0 no 0

1-3 no 1

3-10 yes 3-5

10-20 yes 5-20

20-50 yes 20+

cfo support

quarterly conference calls road shows to fund managers financial press releases financial conferences analyst presentations comparables analysis annual meetings investment bankers investor relations firm outside accountants informal cfo outside advisors meet the payroll minimize equity investment adequate, safe return conserve "excess" cash xxx xxx

xxxx xxxx xxxx xxxx xxxx

xxxx xxxx xxxx xxxx xxxx xxxx

xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

advisors to the cfo

xxxx xxxx

xxxx xxxx xxxx

who manages cash

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cash management objective

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

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50-500 yes 20+ xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxx

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ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

gr ow th

ce p

rly

po

FINANCIAL ISSUES

COMPANY LIFE CYCLE

gr ow th

pr ei

fa st

revenues ($ millions) multi national? number of accountants

0 no 0

1-3 no 1

3-10 yes 3-5

10-20 yes 5-20

20-50 yes 20+

compliance and reporting issues

irs state tax authorities sec -- proxy, s-1, s-3, 8k, 10q, 10k nasdaq listing compliance nasdaq delisting foreign subsidiaries mergers acquisitions dispositions none informal formal board of directors audit committee compensation committee investment committee board of advisors

xxxx xxxx

xxxx xxxx

xxxx xxxx

xxxx xxxx xxxx xxxx xxxx

xxxx xxxx xxxx

xxxx

xxxx

combinations

xxxx

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50-500 yes 20+ xxxx xxxx xxxx xxxx xxx xxx xxx xxx xxxx xxx

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financial reports

xxx xxx xxxx xxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

boards

xxx

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

ip

gr ow th

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ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

gr ow th

ce p

rly

po

FINANCIAL ISSUES

COMPANY LIFE CYCLE

gr ow th

pr ei

fa st

revenues ($ millions) multi national? number of accountants

0 no 0

1-3 no 1

3-10 yes 3-5

10-20 yes 5-20

20-50 yes 20+

accounting system

none single user single user multi user multi currrency function specific (e.g., mrp, time rptg) owner part time accountant controller cfo revenue recognition going concern foreign exchange debt vs equity

xxx xxxx xxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

top financial officer

xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

significant accounting issues

xxxx

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

slo
50-500 yes 20+

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ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

gr ow th

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

do w nt
500-400 yes 20+ xxx xxx xxx xxxx

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11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

gr ow th

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

do w nt
500-400 yes 20+ xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

slo

ur n

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

gr ow th

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

do w nt
500-400 yes 20+ xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

slo

ur n

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002

ACCOUNTING AND FINANCIAL ISSUES AT DIFFERENT PHASES OF A COMPANY LIFE-CYCLE

gr ow th

File = 165281509.xls.ms_office Worksheet = Life Cycle Analysis

do w nt
500-400 yes 20+ xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

slo

ur n

11:24 AM 8/18/2013 Copyright Michael Gonnerman, Inc. 2002